About 2,000 acres of land belonging to five money-losing companies would be put under the bidding hammer soon by state-run real estate firm NBCC (India) Limited. Hindustan Cables Ltd, Instrumentation Ltd, HMT Bearing Ltd, HMT Watches Ltd, and Tungabhadra Steel Products are the companies that have put their land holdings up for auction.

A senior government official said that if the state governments and public sector companies did not bid for those land parcels, the government will examine the feasibility of low-cost housing projects before opening the auction to private firms. “The idea is not to generate revenue from that land sale but to maximise its utilisation,” added the government official quoted above.

Separately, NBCC would also hold talks with state governments in case they are keen to use the land for such projects, chairman Anoop Kumar Mittal said. “If the state government is looking to utilise the land bank available for housing projects, NBCC will participate and provide its expertise,” he said, adding that they are already in talks with some states.

Mittal said there are six more firms that would put their land holdings up for sale in the next few months. “We have also written a letter to all such firms seeking details of their land banks,” he added. NBCC has been appointed as the land management agency for auctioning the real estate assets of loss-making firms and it will get 0.5 per cent of the value realised from the disposal of such land as fee, subject to a cap of Rs. 1 crore.

Earlier this year, the government came out with guidelines on closure of sick and loss-making state-run enterprises and disposal of their assets, including land. The land management agency will determine the current land use and its suitability for industrial, manufacturing or some other purposes, the guidelines said.

The land of such closed units will be first offered to the central government, followed by another central public sector enterprise, state departments and finally state government bodies. In case no offer is received in six months, the disposal of immovable assets will be done through auction, the guidelines said.